A plan has been proposed to supplement the income of low-income elderly households by linking the Earned Income Tax Credit (EITC) with the Basic Pension and senior employment programs. The review suggests that using income support programs, currently operated separately, together could enhance the effect of alleviating elderly poverty.

Basic Pension and Livelihood Benefits Alone Are Insufficient... Limits in Improving Elderly Poverty

Researchers Kim Tae-wan and Han Su-jin of the Korea Institute for Health and Social Affairs (KIHSA) examined the potential for linking existing programs—including the Basic Pension, the National Basic Livelihood Security system, senior employment programs, the EITC, and the housing pension—in a study titled 'Policy Linkage Measures to Improve Elderly Poverty,' published in the Health and Welfare Policy Forum in September 2026.

The researchers concluded that while the Basic Pension and the National Basic Livelihood Security system, the representative programs addressing elderly poverty, each play a certain role, these programs alone have limits in sufficiently improving the elderly poverty problem.

The Basic Pension is paid to the bottom 70% of seniors based on income and assets, but with a monthly payment of about 360,000 won as of 2026, it has limitations as a practical means of guaranteeing retirement income. They also analyzed that although livelihood benefits under the National Basic Livelihood Security system support the poorest seniors, only about 7.6% of seniors were covered as of 2024, limiting its ability to address elderly poverty as a whole.

Proportion of Recipients Aged 60 and Older Rising... EITC Threshold Lowered for Older Adults

Accordingly, the researchers explored ways to link existing income support programs, and in this process, the EITC was presented as one of the complementary income support measures that could be linked with senior employment programs.

The EITC has been in operation since 2008, and after the age criterion for single-person households was abolished in 2018, older adults with earned income can also become eligible if they meet requirements such as income and asset conditions.

Changes are also appearing in the composition of recipients. The researchers analyzed that while the proportion of recipients under age 30 has increased significantly since 2018, the proportion of recipients aged 60 and older is also gradually rising. They interpreted this as a trend in which the share of older adults in EITC receipt is growing as the number of elderly retirees increases and more of them engage in relatively low-income activities.

Senior Job Income Recognized as Earned Income... Linked Receipt Possible

The potential for connecting senior employment programs with the EITC was also presented. This is because income earned through participation in senior employment programs, when recognized as earned income, can qualify recipients for the EITC the following year if they meet payment requirements such as income and asset conditions.

According to existing analyses cited in the study, earned income from senior employment program participants accounted for about 50.7% of household income. Considering this structure, the researchers believed that some senior employment program participants could be included among EITC recipients.

Combining the Three Programs Yields Average Monthly Benefit of 754,000 Won... But Meeting Requirements Is a Precondition

The study also presented an example of the income level when the Basic Pension, senior employment programs, and the EITC are applied together. The researchers assumed a single-person elderly household receiving about 350,000 won per month in Basic Pension as of 2025, and participating in a public-interest senior employment program receiving 290,000 won per month for 11 months. Adding the maximum annual EITC payment for single-person households at that time of 1.66 million won, converted to a monthly basis, would yield an expected average monthly benefit of about 754,000 won.

However, this example assumes that all eligibility requirements for the three programs are met. Actual EITC payment amounts vary depending on earned income, household type, and asset size, and senior employment income also varies depending on the program type and participation period.

'Linkage' Perspective Needed Even in Basic Pension Reform Discussions

The researchers analyzed that such program linkage could contribute to narrowing the gap between disposable income and the poverty line for some low-income elderly households. In particular, they proposed that the Basic Pension reform discussion process should also consider other income support programs such as the EITC and senior employment programs.

The Basic Pension is currently paid based on the bottom 70% of seniors, but discussions continue regarding the fiscal burden from aging population growth and the fairness of eligibility criteria. A so-called 'progressive' reform proposal that pays relatively higher benefits to lower-income seniors is also under review.

The researchers suggested that rather than operating the Basic Pension reform discussion, the EITC, and senior employment programs as separate systems, a policy combination linking them according to seniors' income levels and work capacity could be considered.

Not a 'Universal Solution'... Work Capacity Is Key

However, since the EITC is premised on earned income, it cannot be applied equally to all poor seniors. For seniors who have difficulty engaging in economic activity due to health or caregiving reasons, direct income guarantee programs such as the Basic Pension or livelihood benefits may play a more important role than the EITC. Conversely, the study's intent is that for low-income seniors capable of working at a certain level, using senior employment programs and the EITC together can serve as one means of supplementing income.

Ultimately, this study focuses on the point that the EITC should be examined not as a standalone solution to elderly poverty, but as one of the income guarantee measures that can be linked with existing programs such as the Basic Pension, livelihood benefits, and senior employment programs.

[Actual eligibility and payment amounts for the EITC, Basic Pension, and other benefits may vary depending on household income and assets and program changes, so the latest guidance from relevant agencies such as the National Tax Service and the Ministry of Health and Welfare should be consulted. AI was used for some sentence structuring and data organization.]